Prepaid finance charges should be allowed in the year of payment instead of over Loan period

Cholamandalam Investment & Finance Company Ltd. Vs DCIT (ITAT Chennai) Conclusion: Deduction should be allowed towards finance charges including prepaid finance charges, if any, in the year of payment itself, even though, said expenditure had been treated as deferred revenue expenditure or prepaid expenditure in the books of accounts and claimed over a period of loan. Held: AO noticed that the assessee in its computation of income claimed prepaid finance charges amounting to Rs.19,96,29,043/- and he asked to clarify or show-cause as to how the prepaid finance charges were allowable. Assess...